Should You Join an ACO?

Insight August 15, 2012

Let’s say that you are a physician in a primary care practice, and the local hospital has asked you to join an Accountable Care Organization (“ACO”) that the hospital is forming.  What should you do?  Is this a good idea or not?  What questions do you need to ask in order to make an informed decision?

The National Committee for Quality Assurance (“NCQA”), a nonprofit that evaluates and accredits ACOs and other health plans, defines an ACO as “an alliance of physicians, hospitals, and other providers that coordinates care for a particular group of patients to improve quality and reduce costs.”  While improving quality and reducing costs sounds like a good idea, we all know that the devil is in the details.  How do you know whether an ACO is really for you?

There are several major areas that you should consider when deciding whether to participate in an ACO. The following is an overview of some important topics. Over the next few weeks, we will take a closer look at each area and develop a due diligence checklist.


·         Will the ACO be formed as a taxable or non-taxable entity?

·         Will provider participants be employees or independent contractors?

·         Will the ACO have a system-wide fraud and abuse compliance program?

·         Will the ACO have a system-wide patient privacy compliance program?

·         Will patients be represented in the organization?


·         What kind of initial financial contribution is required of providers?

·         How will savings be shared among individual providers?

·         Are individual providers financially responsible for any losses?

·         What financial projections have been developed?


·         How will data be collected to monitor costs and outcomes?

·         What technology will be necessary to collect this data?

·         Who will bear the cost of implementation and maintenance of this technology?

·         Will the technology qualify for meaningful use funding?


·         What tools will be used to track patient satisfaction and outcomes?

·         Is there a system-wide patient safety program with reporting mechanisms?

·         How are provider participants screened and credentialed?

·         Are evidence-based medicine practices mandated across the ACO?

These are just a few of the areas to be considered when thinking about joining an ACO.  Stay tuned for a comprehensive due diligence checklist